Fri, Jul 13, 2012 - Page 13 News List

Foxconn’s Gou buys stake in Sharp Display Products

Bloomberg

Foxconn Technology Group (富士康科技集團) chairman Terry Gou (郭台銘) completed his purchase of a stake in Sharp Display Products Corp, paving the way for the two groups to cooperate on the production of panels used in televisions and cellphones.

SIO International Holdings Ltd, wholly owned by Gou, paid ¥49 billion (US$617 million) to buy 979,200 shares of Sharp Display from Sharp Corp, Osaka-based Sharp said in a statement yesterday.

The transaction follows a ¥17 billion payment Gou made last month as the first stage in his acquisition of a 37.6 percent stake in the display business.

Gou, founder of Foxconn and chairman of its flagship Hon Hai Precision Industry Co (鴻海精密), which manufactures Apple Inc’s iPad, is investing his own money in the display business to share the risk after Hon Hai agreed to buy a stake directly in Sharp. The display unit will be renamed Sakai Display Products Corp and operate an advanced 10th-generation liquid crystal display factory in Osaka prefecture.

Hon Hai said on June 23 it would book a loss of NT$4.27 billion (US$142 million), while Foxconn Technology Co (鴻準), a smaller affiliate that makes metal computer casings, would mark down about NT$2.1 billion, from their purchase of new stock in Sharp.

The write-downs followed a drop in the stock of the Japanese electronics maker from the ¥550 a share price they agreed on for the deal.

Hon Hai and Foxconn Technology Co will have a combined 9.9 percent stake in Sharp after the companies complete the transaction this month.

Sharp will own 37.6 percent of Sakai Display, while Toppan Printing Co and Dai Nippon Printing Co will own 9.54 percent each after merging their operations with the display maker, according to a May 24 statement. About 5.7 percent of shares will be held as treasury stock.

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